Bonuses of City executives should be linked to targets for the number of senior women appointed at a firm, says government commissioned review.
The proposal to make the remuneration packages of a firm’s executive team dependent on gender balance is one of the preliminary recommendations of the review that Jayne-Anne Gadhia, the Chief Executive of Virgin Money, is leading.
Gadhia will also say that financial services firms should report publically on their gender diversity, and should appoint an executive responsible for gender, diversity, and inclusion.
These preliminary recommendations will be presented at a summit hosted by the Economic Secretary to the Treasury, Harriett Baldwin, at No 11 Downing Street, which will convene senior representatives from across the financial services industry to discuss what more can be done to expand the representation of senior women in the sector.
They will then be discussed by a panel including Michelle Pinggera, partner and member of the European Management Committee at Goldman Sachs, Francesca McDonagh, Head of Retail Banking & Wealth Management UK at HSBC Bank plc, Dame Amelia Fawcett, Chairman of the Hedge Fund Standards Board. The panel will be chaired by Stephanie Flanders, Chief Marketing Strategist at J.P. Morgan Asset Management.
Economic Secretary to the Treasury Harriett Baldwin said:
I know that there are a lot of brilliant, talented women out there whose skills would be an enormous asset to any firm. We should be making the most of that talent as all organisations work better when they benefit from a range of perspectives.
Financial services is at the centre of driving productivity in the UK, but it’s also a sector where the problem of gender diversity is particularly marked – especially in senior management. That is why Jayne-Anne Gadhia’s review is so important, and it is a key strand of the work towards achieving gender parity.
I welcome the review’s preliminary recommendations, and I look forward to the final report next year.
Jayne-Anne Gadhia, Chief Executive of Virgin Money, said:
It should be a wake-up call to everyone in financial services that fewer women progress to senior levels than in any other industry in the UK.
There are many views as to why that might be. Motherhood, remuneration, the ‘old boys’ network’ are all mentioned, but only scratch the surface of an issue that has been hidden for too long.
Businesses will increase productivity and improve results by encouraging more women into senior roles. But the approach needs to fit the individual organisation and the women involved.
My report proposes addressing the issue in a way that the City will recognise. Make it public, measure it and report on it. What gets published gets done.
The review, which was announced by the government in its Productivity Plan in July 2015, will shortly publish a call for evidence on these recommendations, and will publish a final report ahead of Budget 2016.
The OECD have estimated that equalising the role of men and women in the labour market could increase GDP by 10% by 2030.
In its 2014 Global Gender Gap report the World Economic Forum estimates that it will take until 2095 to achieve global gender parity in the workplace.